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Steeling Ourselves For Tariffs

Every candidate for office makes promises. Only the truly ignorant attempt to keep each and every one once elected.

There is a learning curve in politics. Many Republican leaders acknowledged that in the aftermath of each presidential faux pas made in the early days of the Trump administration.

After the president put our relationship with fellow NATO members in jeopardy last year, Senate Majority Leader Mitch McConnell said he was “willing to kind of chalk that up to a rookie mistake.”

Speaker Paul Ryan was quick to excuse the president for his interactions with, and subsequent firing of, former FBI Director James Comey. Ryan said, President Trump was “new at this.”

The president is no longer a rookie and no longer new to the job. He’s simply not up to the task. No amount of on-the-job training will ever improve his ability to govern.

The latest example of the president’s ignorance is his decision to slap tariffs on imported steel and aluminum; part of his campaign promise to put America first. The president thinks tariffs are a good thing. He evidently cut class the day his professors were teaching the fundamentals of foreign trade. It appears that the only course the president did attend in business school was the golf course.

President Trump said, “trade wars are good, and easy to win.” Unfortunately, what the American people need, more than a trade warrior, is a cold warrior. The president, however, would rather punish friends than foes.

Instead of listening to Gary Cohn, his chief economic adviser, who implored him not to impose tariffs, he deferred to Peter Navarro, a fringe former economics professor. Commerce Secretary Wilbur Ross also weighed in. He believes tariffs on imported steel and aluminum are a wise move. Perhaps because of the large financial stake he’s held (and may still hold) in domestic steel companies.

Cohn resigned, prompting a 300-point nosedive on Wall Street.

Imposition of tariffs will further alienate heretofore reliable allies and partners, who may end up retaliating with tariffs of their own. Tariffs will negate whatever perceived positive outcomes Republicans thought they would achieve through tax reform. Mostly, they will hurt the American people. Especially those among the president’s most stalwart supporters.

The trade measures President Trump proposes will not save the aluminum and steel industries in this country. They’ve long been on life support and it’s highly unlikely they’ll survive, even with tariffs in place. The president told a roomful of steel and aluminum executives, “you’ll have protection for a long time.”

A long time doesn’t matter to those running these companies. They know their industries are among the walking dead. This is solely about short-term shareholder value. Those at the top have the most to gain from protectionist measures. But they’re not alone. Labor leaders have their own agenda.

United Steelworkers President Leo Gerard thinks he has a solution: exempt Canadian steel producers from tariffs so they can join the U.S. and apply their own tariffs to “unfairly” traded steel and aluminum from countries like China, Brazil, and South Korea.

That suggestion is as self-serving as the policies steel and aluminum industry lobbyists have pushed for. Gerard’s union represents workers in both the U.S. and Canada. It’s a win-win for him and his membership. Yet, the president has notoriously stabbed union leaders and members in the back before.

Remember all those good union jobs President Trump “saved” at Carrier, in Indianapolis, last year? Neither does the president. Many of those jobs were eventually off-shored to Mexico. Maybe Jared Kushner’s down there right now trying to bring them back.

Tariffs will bring no long-term trickle-down gain for the American people. Manufacturers who currently rely on affordable steel and aluminum will soon find themselves paying more. Not because of tariffs, but because of trade policies that will put more money into the pockets of their domestic suppliers once they monopolize the market and collectively start gouging prices. Those increases will be passed along to consumers.

The net effect of tariffs reducing our trade deficit will be minimal. The impact of the president’s dog-and-pony show, however, will be long-lasting. And we will bear the burden. Promises borne of ignorance may be better left unkept.